The Foreign Service Journal, March 2019

68 MARCH 2019 | THE FOREIGN SERVICE JOURNAL AFSA NEWS AFSA Treasurer’s Report on 2018 The American Foreign Service Association continues to be in excellent financial health as we enter 2019. AFSA has a strong financial reserve. AFSA’s president, board members and chief operating officer worked rigorously to find efficiencies in operations during 2018. The Governing Board has approved a 2019 budget with prudent spending reductions. We will continue the effort to create more efficient operations in the year ahead, while working to provide better services for AFSA’s members and strong advocacy for the Foreign Service. Budget Operations With a robust and committed membership base, we are able to sustain a professional staff of 34 and a planned $5.2 mil- lion operating budget for Calendar Year 2019. During 2017 and 2018 under the leadership of Presi- dent Ambassador Barbara Stephenson, AFSA has shifted resources to strengthen our outreach efforts with stronger capacities for communicating the priority issues of the Foreign Service to the public and key constituencies. AFSA and its Political Action Committee worked more closely with Congress and like-minded organizations. We sought to better mobilize the strengths of our retiree members in this vital work. These work streams allowed AFSA to speak out clearly and more effectively on steps that endanger the Foreign Service. We built partnerships with those who understand and sup- port the vital role our diplomats play in support of America’s interests around the globe. Over the past year, we have also taken steps to provide additional resources to support AFSA’s members in need of labor and management assistance. Regarding our popular scholarship program, a more prudent draw from the scholar- ship reserve funds and efficiencies in program management meant that AFSA offered additional merit scholarship awards in 2018 and plans to continue to do so in 2019. Over the course of 2018, we worked hard to maintain and strengthen our membership base, despite the reductions in numbers of entrants into the Foreign Service and increased departures. AFSA reached out regularly to those joining the State Department, to officers around the globe, and to those retiring and leaving the department. We begin 2019 with 16,806 members, an increase over 2017 and a new high. Active-duty membership represents approximately 81 percent of our potential membership from the foreign affairs agencies. Thank you, members! To sustain the programs and services for members dur- ing this time of severe challenge to the Foreign Service, the Governing Board approved a 2.3 percent increase in AFSA membership dues, based on the official estimated 2018 cost of living increase. Fund Operations Operating Reserve: To protect AFSA from unexpected risks, we maintain a reserve fund of approximately $3 million. This reserve is intended to protect AFSA from obligations assumed in our operating budget and regular activities, as well as from any unanticipated capital maintenance expendi- tures. This reserve, representing some 60 percent of our operat- ing budget, prepares us well for any turbulence or unex- pected needs ahead. As you can see in the chart on the next page, AFSA has maintained a solid operating reserve in this century. AFSA is blessed with debt-free ownership of its head- quarters, thanks to the prudent actions of the association’s leadership in recent years. The Operating Reserve began 2018 with $3,155,737 invested and ended the year with $3,122,241. Scholarship Fund: This 501(c)(3) entity was founded in 1924 to help the children of Foreign Service members pay for college. The fund has grown over the decades due to gener- ous donations and bequests from AFSA members and the rising value of its professionally managed portfolio of stocks and bonds. As of the end of 2018, the fund held $9.7 million. The chart on the next page shows recent changes in fund valuation. Each year, 4.5 percent of the fund’s 5-year average value is withdrawn and distributed as scholarships to Foreign Service children. Calculating withdrawals based on the 5-year aver- age value smooths out stock market volatility to produce a relatively steady flow of funds year to year. The money is restricted and can only be used for scholarships. Over the past 27 years, the AFSA Scholarship Program has disbursed more than $4.7 million to 2,400 students. In 2018, it awarded $220,000 in needs-based financial aid to 59 youths and $129,000 in merit scholarships to 36 recipients. The same funding levels are planned for 2019. Fund for American Diplomacy : AFSA continues to encour- age donations to our Fund for American Diplomacy to help educate the American public about the role of the Foreign Service and how important diplomacy is as a tool of Ameri- ca’s influence, power and success in the world. FAD is organized as a 501(3) (c). You can each imagine how important this work will remain in the year ahead given

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